A surge in gas prices triggered by the Iran war has caused a knock-on spike in the price of electricity in the UK, Italy and many other European markets.
This is because gas almost always sets the price of power in these countries, even though a significant share of their electricity comes from cheaper sources.
This “coupling”, which is part of what UK energy secretary Ed Miliband calls the “fossil-fuel rollercoaster”, is due to the “marginal pricing” system used in most electricity markets globally.
After another fossil-fuel price shock, just four years after Russia’s invasion of Ukraine, this coupling between gas and electricity prices is once again under the spotlight, in the UK and the EU.
There are various alternatives that have been put forward as ways to break – or “decouple” – the link between gas and electricity prices.
Electricity prices could be “decoupled” from gas prices by changing the way the market works, but ideas for doing this either have not been tested or have problems of their own.
Some people have implied that the UK could insulate itself from high and volatile international gas prices by extracting more gas from the North Sea.
However, contrary to false claims by, for example, the hard-right climate-sceptic Reform UK party, this would not be expected to cut energy bills, because gas prices are set on international markets.
Finally, electricity prices can be “decoupled” from gas by burning less of it, a shift that is nearly complete in Spain and that is already having an impact in the UK.
- Why does gas set the price of electricity?
- What is the impact of gas setting the electricity price?
- What market reforms have been proposed?
- Why is ‘marginal pricing’ in the news again?
- Would it help if more gas were extracted domestically?
- Would burning less gas stop it setting electricity prices?
Why does gas set the price of electricity?
In liberalised economies, electricity is bought and sold via market trading. The market uses a system called “marginal pricing” to match buyers with enough supply to meet their demand.
(The same system is used in most commodity markets, including for oil, gas or food products.)
All of the power plants that are available to generate make “bids” to sell electricity at a particular price. The bids are arranged in a “merit order stack”, from the cheapest to the most expensive, shown in the illustrative schematic below.
This means that the price of gas sets the price of electricity, whenever gas plants are at the margin.
In the UK, the marginal unit is almost always a gas-fired power plant. As a result, one widely cited academic analysis found that gas set the price of power 97% of the time in the UK in 2021.
In contrast, the analysis found that gas only sets the price of power 7% of the time in France, as shown in the figure below. This is because the French market is dominated by nuclear power.
The “pay as clear” marginal-pricing system means that gas sets the price of power more often than might be expected, given its share of electricity generation overall.
For example, gas set the price of power 97% of the time in 2021, even though it only accounted for 37% of electricity generation that year. Equally, even though renewables now make up around half of UK electricity supplies, gas still usually sets the price of power in the UK.
(There are some important subtleties to this, due to the fact that not all gas-fired power plants are equally expensive to run. This is discussed further below.)
Overall, the fact that gas hardly ever sets the price of power in some European markets hints at the potential to decouple electricity prices from gas, by shifting towards alternative sources.
What is the impact of gas setting the electricity price?
The tight coupling of gas and electricity prices in the UK and other markets is the source of significant political debate, particularly during periods when the price of gas soars.
When gas prices hit record highs after Russia’s invasion of Ukraine in 2022, politicians, commentators and the media rushed to understand why this also spiked electricity bills.
The same dynamic is playing out in 2026, following the attacks on Iran by the US and Israel, the closure of the Strait of Hormuz and the resulting surge in international gas prices.
An editorial in the Financial Times published earlier this month is headlined: “The déjà vu of Europe’s energy shock.” It says the crisis is once again raising questions over electricity pricing:
“In Britain, in particular, questions remain on how to reform its electricity pricing, which currently leaves it highly exposed to volatile wholesale gas prices.”
This exposure is illustrated in the figure below, which shows the tight link between prices on the “day-ahead” markets for gas and electricity.
Indeed, recent analysis from the UK Energy Research Centre (UKERC), published before the Iran war, found that high gas prices were still the biggest driver of high UK electricity bills.
The UK is not the only market being hit by high electricity prices after the outbreak of war in the Middle East. Italy is also suffering, at a time when it was already in the midst of a major debate over how to cut electricity prices, which are also high due to its heavy reliance on gas power.
What market reforms have been proposed?
Historically, some governments set the price of electricity themselves. However, this is increasingly rare and most countries now have “liberalised” electricity markets to determine prices.
These markets use the “pay as clear” system of marginal pricing, described above, to balance supply and demand in each hour of the day.
Alternative models include “pay as bid”, where each power plant is only paid the amount that it bid to supply electricity, rather than the higher price of the marginal unit.
However, this “would not provide cheaper prices”, according to the European Commission, because bidders would seek to maximise their profits by guessing the clearing price:
“In the pay-as-bid model, producers (including cheap renewables) would simply bid at the price they expect the market to clear, not at zero or at their generation costs.”
Another option would be to create two separate markets, one “green power pool” for renewables and another for conventional sources of electricity.
One proponent of this idea is Prof Michael Grubb at University College London. In a March 2026 post on LinkedIn he says:
“The impact of surging gas prices on electricity will again highlight the oddities of our current electricity market – which make sense to many economists, but to hardly anyone else.”
Explaining his rationale for creating separate power markets, he continues:
“The crisis again emphasises that gas-generated power and renewables are not really the same commodity and deserve distinct and tailored market structures to also enhance transparency. Unless and until that occurs, no amount of policy tinkering can overcome the volatility imposed by geopolitical events outside our control.”
However, the UK government concluded in 2024 that it “[did] not consider [a green power pool] to be deliverable”, adding that, even if it were possible, it “would not provide additional benefits”.
This was part of the UK government “review of electricity market arrangements” (REMA), which considered – and then rejected – a series of alternative ways to structure the market.
Similarly, it is less than two years since the European Commission also considered – and then rejected – alternatives to the marginal pricing system, notes Jon Ferris, head of flexibility and storage at consultancy LCP Delta, in a LinkedIn post. The commission explains:
“This model provides efficiency, transparency and incentives to keep costs as low as possible. There is general consensus that the marginal model is the most efficient for liberalised electricity markets.”
In the UK, a debate in parliament in early March 2026 saw Labour MP Toby Perkins questioning the marginal pricing system, which he said was now “far less robust”. He said:
“Because renewables are cheaper, should we not look to benefit from that, rather than having a system that allows gas to set the price, even if it accounts for only 1% of our energy?”
Ultimately, however, marginal pricing is the “worst approach to clearing markets apart from all the others”, Ferris tells Carbon Brief.
The Iran crisis has also been used to resurface a more radical option, put forward last year by consultancy Stonehaven and NGO Greenpeace, of taking gas out of the market completely.
The idea would effectively see gas plants being taken into a strategic reserve, where they would receive a regulated return for remaining open. They would be managed centrally and called on to generate power as needed outside of the market, which would continue to use marginal pricing.
Adam Bell, partner at Stonehaven and the government’s former head of energy policy, tells Carbon Brief that it would be possible to implement within 18 months, but only if moving at a pace that the civil service might describe as “brave”.
Why is ‘marginal pricing’ in the news again?
Despite the decisions at UK and EU level to reject the alternatives, interest in moving away from marginal pricing has recently been reignited – even before the shock of the Iran war.
For example, in a speech in February, European Commission president Ursula von der Leyen said a recent meeting of member states had seen “intense discussion” over marginal pricing:
“We did not come to a conclusion. I want to be very clear on this one. But to the next European Council, I will bring different options and findings on whether it is time to move forward on the market design or whether we are still good on this market design.”
A subsequent leak from the commission, seen by Carbon Brief, also implies that marginal pricing is up for debate, as part of ongoing discussions on how to tackle high energy prices.
Subsequently, Philippe Lamberts, climate advisor to von der Leyen, made comments implying that the marginal pricing system was problematic.
In response, ahead of a meeting of EU governments in the week beginning 16 March, a group of seven member states wrote to the commission warning against market reform.
Their letter says that “no satisfactory alternative model has been identified” and that “all other options discussed would introduce inefficiencies”, compared with sticking to marginal pricing.
Industry group Eurelectric makes similar comments in its own letter, as well as warning about the uncertainty that would be created by market reform. It says:
“Delivering massive investments in clean power generation is the structural answer to reduce our dependence on fossil fuels. Reopening the fundamental principles of market design risks increasing uncertainty, delaying investment decisions and, ultimately, raising system costs.”
Another element to the debate has come from Italian government proposals to subsidise gas plants, in an effort to reduce electricity prices in the country.
The proposal has drawn comparisons with the so-called “Iberian mechanism”, under which the governments of Spain and Portugal subsidised gas power during the 2022 energy crisis.
This support did yield “short-term price relief”, says Chris Rosslowe, senior analyst at thinktank Ember in a post on LinkedIn. However, he says it also had “perverse consequences”, including increasing demand for gas “in the middle of a gas supply crisis”.
These sorts of ideas “would cause a lot of collateral damage” in terms of market efficiency, investor confidence and other areas, says Prof Lion Hirth at the Hertie School in Berlin, in a LinkedIn post.
Jean-Paul Harreman, director at consultancy Montel Analytics, writes in an article on LinkedIn:
“[R]eplacing transparent marginal pricing with political price formation is often like replacing a thermometer because you dislike the temperature reading. It may feel satisfying. It does not change the weather.”
Would it help if more gas were extracted domestically?
In the UK, there has also been intense pressure from opposition politicians and some sections of the media to expand gas production in the North Sea.
Nigel Farage, the climate-sceptic head of Reform UK, was recently quoted by Bloomberg as claiming: “Producing our own gas would reduce everybody’s electricity bills significantly.”
There is no evidence to support this claim.
While the opposition Conservatives have also been loudly calling for an expansion of North Sea drilling, they have been more circumspect about any impact on bills.
Writing in the Daily Telegraph, Conservative leader Kemi Badenoch only indirectly links such an expansion in domestic gas production with lower bills. She writes:
“[P]art of the reason we’re being hit so hard by [the Iran war] is because we are not drilling our own oil and gas thanks to [the government’s] net-zero madness.”
Badenoch’s own shadow energy secretary Claire Coutinho contradicted this idea in 2023, when she was in government. She said at the time that awarding new oil and gas licensing “wouldn’t necessarily bring energy bills down”.
This is because, as the UK’s energy minister Michael Shanks said at a recent event: “We will always be a price taker in international fossil-fuel markets, not a price maker.”
What he is saying is that UK gas production is small relative to the size of the European and global market for the fuel. As such, any increases in UK production would not materially affect prices.
Moreover, North Sea gas production has been in decline for decades and this is set to continue, whether or not the government allows new drilling to take place. This is because much of the gas it once contained has already been extracted and burned.
Would burning less gas stop it setting electricity prices?
The final idea for breaking the link between gas and electricity prices is simply to burn less gas.
This is one of the key motivations behind the UK government’s “clean power 2030” plan, which aims to largely decarbonise electricity supplies by 2030.
The government said when launching its plan:
“These investments will protect electricity consumers from volatile gas prices and be the foundation of a UK energy system that can bring down consumer bills for good.”
In 2026, however, UK electricity prices are still largely dictated by gas prices, as described above.
Yet this does not mean that the expansion of renewables has had no impact. Indeed, analysis by thinktank the Energy and Climate Intelligence Unit (ECIU) suggests that renewables have already reduced UK wholesale electricity prices by a third in 2025.
As more renewable generation is added to the system, the most expensive gas plants in the merit order “stack” are knocked out of the market. Even though another gas plant may still be setting power prices, it will be a cheaper and more efficient unit.
This intermediate impact of renewables is already visible when comparing electricity prices in the UK with those in Italy and Spain, as shown in the figure below.
The figure shows that UK wholesale electricity prices have been lower than those in Italy, as a result of the expansion of renewable sources over the past decade. (Prior to this, wholesale prices were similar in both countries.)
The contrast with prices in Spain is even larger , where Ember says “strong solar and wind growth [has] reduced the influence of expensive coal and gas power on the electricity market”.
The UK is already seeing electricity prices that are “decoupled” from gas prices on windy days. In addition, an increasing amount of electricity is set to be generated by renewable sources that hold “contracts for difference” (CfDs).
CfD projects are paid a fixed price for the electricity they generate, regardless of the price on the “day-ahead” wholesale market. As such, they dilute the impact of gas on consumer bills.
In 2022, when the last energy crisis hit, only 7% of UK generation was covered by CfDs, according to freelance “energy geek” Ben Watts. As of 2026, he says this has climbed to 13%.
By 2030, CfD projects will make up as much as half of total electricity supplies in the UK.
Callum McIver, research fellow at the University of Strathclyde and a member of the UKERC, tells Carbon Brief that CfDs are a “mechanism to decouple bills from the cost of gas”. He adds:
“With significant volumes of new and lower cost renewables on CfDs expected to connect to the system over the next few years, the impact of the scheme on price decoupling should accelerate…This provides an ever increasing hedge against future price shocks.”
Power-purchase agreements (PPAs) can have a similar effect. Here, large users such as industrial sites sign a contract with a power plant to buy the electricity they generate at a fixed price. Again, this takes some electricity out of the wholesale market, diluting the impact of gas prices.
Increases in UK renewable generation are yet to unseat gas from its role in determining electricity prices in most hours of the year, but this shift is starting to have an impact.
Analysis by consultancy Modo Energy suggests that electricity prices in the UK were above the price of gas power in nearly 90% of hours in 2018, a figure that had fallen to below 80% in 2024. Modo’s director Ed Porter said on Twitter: “The link between gas and power prices is weakening.”
In Spain, analysis by Ember shows that the link is well on the way to being completely broken. Ember data shared with Carbon Brief shows that power prices were above the cost of gas power in 52% of hours in 2021, but this had fallen to 15% of hours in 2026 to date.
This data, shown in the figure below, is in stark contrast with Italy, where the influence of gas on electricity prices has actually increased in recent years.
A similar effect would be possible for the UK. Recent analysis from LCP Delta shows that the UK electricity system would be “almost entirely insulated from gas price shocks”, if it reaches the government’s clean-power 2030 targets.
Posting on LinkedIn, Sam Hollister, principal and head of UK market strategy, writes that a spike in gas prices similar to current levels would only increase household bills by 8%, if the 2030 targets are met. In contrast, bills would rise by 45%, if no CfD-backed renewables were on the system.
In his LinkedIn article, Montel’s Harreman concludes:
“The real structural solution to high power prices is not to mute marginal pricing, but to reduce exposure to fossil fuels and accelerate clean capacity, grids and flexibility. That lowers marginal costs structurally rather than cosmetically.”
“Marginal pricing is uncomfortable in volatile times. But discomfort is not evidence of failure. It is often evidence that the system is telling the truth. And, in energy markets, obscuring the truth is usually more expensive than confronting it.”
The post Q&A: Why does gas set the price of electricity – and is there an alternative? appeared first on Carbon Brief.
Q&A: Why does gas set the price of electricity – and is there an alternative?
Türkiye and Australia risk losing their credibility as hosts of this year’s COP31 UN climate summit if they keep betting on fossil fuels at home, climate policy experts have warned.
As governments are expected to continue fraught talks over how to advance the global transition away from oil, coal and gas in Antalya this November, both of the co-host countries are pursuing fossil fuel expansion at home, without a national timeline to phase out their use.
Türkiye has accelerated its rollout of wind and solar energy in recent years. But that progress has yet to make a dent in the country’s dependence on fossil fuels for power, as demand growth has outpaced the renewables build-out, new analysis by Climate Action Tracker (CAT) has found.
The share of electricity generated by burning coal and fossil gas – 56% in 2025 – has barely changed since 2019, and total fossil fuel use in the power sector, and the emissions it produces, are still rising, according to the report released on Friday.
The Turkish government has also signalled that fossil fuels will remain a central component of its energy mix and has outlined plans to expand the country’s burgeoning domestic gas production in the Black Sea.
‘Need to demonstrate seriousness’
Australia, which will chair the Antalya negotiations, relies on fossil fuels for over 60% of its electricity, with coal alone still supplying 45%. According to experts, it lacks an ambitious plan to shift away from fossil fuels at home, relying heavily on carbon offsetting to reach its climate targets.
Australia is also the world’s third-largest fossil fuel exporter and has plans to expand its coal and gas production, which is backed by significant government subsidies. It recently upset climate groups by approving an extension of the Saraji open-cut coal mine in Queensland.
Türkiye says it has “final decision” at COP31 despite Australia running negotiations
Jennifer Morgan, a senior fellow with the Fletcher School of Law and Diplomacy at Tufts University and former climate envoy for Germany, said Türkiye and Australia need to demonstrate their seriousness about their COP presidency roles by leading by example on the energy transition.
“They have made progress in renewable energy,” she told reporters this week. “But I think their credibility – and their ability to therefore bring momentum and good outcomes to the COP – will depend on their taking further action at home.”
Türkiye’s electrification homework
The co-hosts’ fossil fuel policies are being scrutinised in the run-up to the annual UN climate summit, with much riding on the signal climate diplomacy sends on the energy transition.
Türkiye has so far stopped short of putting any overt political capital behind the fossil fuel transition itself. It has instead been rallying support for a new global electrification target of 35% by 2035, seen as the centrepiece of this year’s non-negotiated Action Agenda put forward by Ankara.
COP31 president Murat Kurum said last week the push to electrify economies – through measures like electric vehicles and heat pumps – will “automatically” lead to a reduction in the use of fossil fuels.
Türkiye’s own energy plan projects the country’s electrification rate would fall short on the global target and only hit 25% by 2035, according to the CAT report, which called for a “substantial step-change” in electrification policies and the deployment of more renewable power and grid infrastructure.
Coal still dominant
CAT’s analysts also warned that, without a parallel phase-out of fossil fuels, rising electricity demand risks being met in part by coal and gas, failing to deliver the emissions reductions the electrification target is meant to achieve.
Türkiye has had some success in its clean energy build-out: the share of electricity generation from wind and solar rose to 22% in 2025, up from 12% in 2020, according to the CAT report.
But coal’s role in Türkiye’s electricity mix has also grown, in both its share and absolute terms, over the past decade. And while reliance on fossil gas has declined overall, it still plays an important role in Ankara’s energy policy, which is pushing to boost domestic gas production in the Black Sea.
Dr Niklas Höhne from the NewClimate Institute said the government could demonstrate leadership as COP31 president by building on its recent successes in increasing its renewable energy capacity and announcing targets and plans to phase out coal and gas ahead of the summit.
According to CAT, Türkiye should phase out coal by 2040 and fossil gas by 2045 at the latest to align its power sector with global efforts to limit the rise in global temperatures to 1.5C above preindustrial times.
Türkiye quiet on fossil fuel roadmap
Ümit Şahin, coordinator of climate change studies at the Istanbul Policy Center (IPM), said Türkiye’s strategy is to approach the fossil fuel debate exclusively from the “end-use point of view”.
“I don’t expect any push from the Turkish presidency to the producer countries in terms of fossil fuel production,” he told reporters.
Neither does Şahin believe the Turkish presidency will throw its political weight behind another big-ticket item for COP31: a new global roadmap to transition away from fossil fuels.
Brazil took on the responsibility to voluntarily draft this document outside of the formal negotiations as a way to break the deadlock at last year’s UN summit in Belém when governments clashed over whether to develop one.
The outgoing COP30 presidency will deliver the roadmap in early November – but it will be up to Türkiye and Australia to guide countries towards a decision on how the blueprint will be taken forward, either inside or outside the negotiations.
Leadership needed
Australia’s Chris Bowen, COP31’s president of negotiations, promised to lobby producing countries to deliver a “meaningful step forward” on the fossil fuel transition in an interview with The Guardian earlier this year. But he has been quiet on the role Australia sees for the fossil fuel transition roadmap.
Natalie Jones, senior policy advisor at the International Institute for Sustainable Development (IISD), said the COP31 co-presidents “must provide clear leadership” on this process.
“This roadmap cannot be left in a dusty drawer,” she told journalists. “Rather, it must be translated into action, with all countries identifying what elements they can adopt or develop in their own national roadmap.”
-
Made in Nigeria: The race to build an African solar industry from scratch
A solar power revolution is gathering pace in Africa and Nigeria wants a slice of the fast-growing industry, but competing with Chinese imports won’t be easy -
China’s industrial engine starts to break its fossil fuel habit
Despite a rebound in coal generation this year, clean energy from wind and solar is gaining ground on the fossil fuels that have powered decades of industry growth
Like Türkiye, Australia has yet to produce a national blueprint for winding down coal, gas and oil. Rather than moving toward a phase-out, state and federal governments have kept expanding fossil fuel licensing over the past year, according to a new analysis published this month by Climate Analytics.
Under existing policy, both coal and gas are on track to remain in Australia’s power system as late as 2050 – a trajectory the report defines as incompatible with the 1.5C limit the country says it’s committed to.
No binding end dates for the Netherlands
Analysts are watching out for national transition roadmaps as a bellwether for governments that claim to be leaders in the global shift away from fossil fuels.
The Netherlands, which co-hosted the first fossil fuel transition conference in Santa Marta this year, published its own domestic roadmap earlier this week. The document followed through on a pledge that “leadership on transitioning away from fossil fuels must be backed by concrete action, not just ambitious words”, said a spokesperson for Stientje van Veldhoven, the Dutch minister for climate policy.
But experts criticised the plan for failing to set a binding end date for the country’s fossil fuel production and use. While targeting a rapid increase in renewables capacity, the Dutch government only commits to phasing out oil, gas and coal “in the energy and feedstock system to eventually zero, and to minimise fossil use” by 2050.
Yvo de Boer, a former Dutch diplomat and executive secretary of the UN climate body, said the Dutch roadmap falls short of what’s needed to give industry the confidence to deploy capital in support of the energy transition with greater predictability.
“Ultimately, a roadmap without deadlines is nothing more than a footpath paved with good intentions,” he added, writing on LinkedIn.
The post Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn appeared first on Climate Home News.
Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn
Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.
This was the message from a coalition of global institutions working on energy, water and agriculture at this month’s Africa Food Systems Forum in Kigali, Rwanda.
“Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.
Using more renewables – especially solar power – to drive food systems would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income and resilience among farmers, food processors and other small enterprises, the coalition added.
In an interview with Climate Home News at the forum, Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA) – a body representing private-sector developers of small-scale, off-grid electricity systems across the continent – said its members are starting to recognise this interdependence and are increasingly considering businesses that combine energy with agricultural activities.
-
Second Africa Climate Summit seeks to jump hurdles to green industrialisation
A report on progress since the first summit in 2023 says financial, infrastructure and trade obstacles are hampering “climate-positive growth” on the continent
This, Niyi-Afuye added, could lead to greater supply and use of clean power for key processes like irrigation, food processing and storage, creating new sources of revenue for both sectors.
CHN: Conversations at the Africa Food Systems Forum highlighted how organisations working in energy and agriculture often operate in silos. What has hampered their collaboration, and how has that affected Africa’s economic development?
A: Most mini-grid companies in Africa were primarily incentivised to achieve connections. If you look at some ongoing projects, you see a cost-per-connection model [of revenue]. When a subsidy is tied to achieving a connection, regardless of whether it is a productive connection, you might not notice the problem until five years down the line, when you realise the cash flows are not what you projected.
Despite African walkout, fractious land COP ends without drought deal
So now we’re in a “come-to-Jesus moment” as an industry, where we’re righting the wrongs and adjusting our business models to make sure companies do not go bust and there is some level of sustainability over the long term.
The saying is not wrong that we’ve been working in our own silos because we’ve focused on the smaller things instead of the helicopter view. There needs to be cross-pollination [between the energy and agriculture sectors] because, if we are thinking about industrialisation, energy is a key driver of industrialisation. We will not achieve that if we’re not in the room and part of those conversations.
CHN: Productive use of energy is intended to ensure electricity access goes beyond lighting homes to improving livelihoods, creating jobs and powering equipment. But what happens when farmers cannot afford the equipment they need to do that? How can energy, agriculture and equipment players work together to make the transition more accessible?
A: That’s why we’re having conversations with companies set up to de-risk the agriculture sector. By leveraging that connection, we’re able to aggregate potential energy needs and develop instruments that make equipment more affordable through bulk procurement.
We can have arrangements that make it easier for farmers and food producers to lease equipment and eventually own it over a period. There’s no real pressure to recover the capital very quickly because you’re looking at scale.
There is a whole lot across the agricultural value chain that needs energy, from farming and harvesting to food processing and value-addition. We need to understand the energy needs across the value chain and bring our members in to provide solutions.
Developers do not necessarily need to provide every productive-use solution themselves. They can partner with equipment suppliers, financiers, agribusinesses and other service providers to enable customers to use electricity productively. The objective is simple: do not just electrify communities; enable economic activity that uses that electricity.
CHN: When Africa’s industrialisation is discussed, you hear things like renewables cannot provide enough baseload, while some food processors are sceptical about switching to renewable energy because of these concerns about reliability. What is your response?
A: It’s not a controversial statement to say that a typical baseload is usually from the grid, and it’s usually from multiple sources including renewable energy. For large-scale operations, we can look at blending multiple sources of energy. But how do we solve the problem of a mid-sized farmer? We can solve it with a mini-grid using renewable energy.
Comment: Every country needs a model to help optimise its energy transition
If you go to a small farmer in a rural area, they don’t care about what source of energy they’re getting. They just want something that can help them get from A to B. If you look at the direct energy needs of farmers and food processors, I’m sure 90 percent of their consumption can be solved by renewable energy. Let’s start with that problem first. Then, as they scale, they might need to ramp up, and we can start talking about a bigger baseload.
CHN: How much agricultural value is lost because farmers and food businesses lack reliable, affordable electricity?
A: If you look at, for example, the fact that we need to maybe plant tomatoes or strawberries in Jos before it gets to Lagos [Nigeria], which most likely is by road, I can assure you that a good chunk, if not stored properly, would be bad by then. So the fact that we do not have energy is in itself a lost opportunity to maximise the potential of the agriculture sector. So until we’ve solved the energy problem, we will not salvage waste – and for me that is a lost opportunity.
CHN: AGRA, an institution focused on scaling agricultural innovations to help smallholder farmers, estimates a massive shortfall between current investments in the continent’s food systems and what is actually needed to build a resilient, profitable agricultural economy – to the tune of $180 billion per year. Can integrating energy into food systems help bridge that gap?
A: Yes – if energy can help unlock the potential to earn more money, investors will follow the money. Investments go where there is certainty, and until there is certainty around cash flow and revenue, investment will be limited.
My vision is to see more Power Purchase Agreements (PPAs) being signed between energy players and the agriculture sector. We can start by getting people into the room, understanding their pain points, crafting a framework and documentation that works for both parties, and then seeing deals happen.
This interview was shortened and edited for clarity.
The post How clean energy can boost business for Africa’s food producers appeared first on Climate Home News.
How clean energy can boost business for Africa’s food producers
Cristina Rumbaitis del Rio is a senior advisor on adaptation and resilience with the United Nations Foundation and Mattias Söderberg is global climate lead at Danish NGO DanChurchAid.
Recent extreme events – from wildfires and heatwaves in Europe to flash flooding following a glacier collapse in Nepal – have shocked and devastated communities, bringing years of warnings about such climate impacts to the doorstep of communities around the world.
One thing is certain: the new climate reality is here – and the adaptation strategies designed for yesterday’s world are no longer sufficient.
Attribution science has since shown that the hotter and more frequent heatwaves we’re experiencing around the world would have been virtually impossible without today’s high concentrations of greenhouse gases in the atmosphere. Climate shocks are now so severe that they reverberate through supply chains, food and water systems, financial markets and the movement of people.
-
Foreign minister: Nepal needs “meaningful” international support to face climate threats
Following its recent Himalayan flooding disaster, the South Asian nation is seeking urgent help from a new UN climate fund, appealing for “stronger global solidarity” -
Palestine: Israel’s bombing has left Gaza vulnerable to climate change
With homes, hospitals and water storage destroyed, Palestine’s government says that Gazans have little protection from climate impacts and sets conditional emissions targets
They must be a catalyst for a new way of thinking about adaptation and resilience, and how we finance solutions that work. A failure to invest in adaptation in one region can create costs far beyond it, which is why the concept of shared resilience is critical for leaders to grasp.
Investment not charity
At the UN General Assembly (UNGA 81) this month, leaders have an opportunity to translate today’s urgency into concrete commitments on adaptation and loss and damage finance ahead of COP31.
Those commitments are needed to underpin global stability, shared prosperity and human security. Governments should use this moment to show what a new response looks like: finance that reaches communities faster, supports locally grounded solutions, strengthens national systems, and helps countries prepare before the next shock arrives.
If we want sustained economic growth, food and water security, and resilient and prosperous societies across every region, adaptation must be at the heart of today’s development and security agenda. It cannot be just a future planning consideration or a narrow issue for climate ministries. Adaptation is now everyone’s business – and it must be financed fast and fair.
UN Secretary-General António Guterres has repeatedly framed climate finance as an investment rather than charity, warning that “a world in climate chaos cannot be a world at peace” and describing human security as freedom from the chronic and sudden disruptions that climate change multiplies.
What’s more, adaptation delivers a real return-on-investment, with researchers estimating that every dollar invested produces $10 in benefits, saving lives, protecting livelihoods, and reducing the costs of future disasters.
Hitting adaptation limits
The urgency to scale adaptation systematically is growing. The newly released “Limiting Overshoot” report from the UN Environment Programme (UNEP) confirms what scientists have long warned: exceeding global warming of 1.5C is now unavoidable under current policies. Yet, how high temperatures rise – and how long the world remains above the 1.5C threshold – will determine whether communities, economies and entire ecosystems can keep pace.
There are limits to adaptation. When we breach those limits, lives and livelihoods are lost, and people and ecosystems suffer greatly. We cannot simply build yesterday’s infrastructure a little stronger and assume it will be enough.
Nepal flood destruction shows “limits to adaptation”, scientists say
We need to fundamentally change the systems that determine how societies anticipate, absorb and recover from both immediate and evolving non-linear climate shocks. This includes transforming physical systems, such as infrastructure, and the governance systems that affect where and how we live to how we maintain our health and wellbeing.
Finance today is nowhere near the scale of the challenge.
The UNEP “Adaptation Gap Report 2025” estimates the shortfall in adaptation finance in developing countries at $284 billion–$339 billion a year – roughly 12 to 14 times current international public flows of around $26 billion. That gap is a development, economic and human security problem, especially for the most vulnerable populations who have contributed the least to causing the climate crisis.
Building resilience into financial systems
There are already signs of what a more systemic adaptation response could look like. Communities around the world are delivering practical solutions at local level, even as adaptation finance remains notoriously, and appallingly, difficult to access. Cyclone-resistant homes, local forecasting capacities, drought-resistant crops, heat insurance for pregnant informal workers and mangrove restoration are rooted in local knowledge and lived experience, while delivering benefits far beyond the communities where they originate from.
But local innovation alone is not enough; the systems around it need to be resilient too.
Jamaica offers one example. The country has built a multi-layered disaster-risk financing framework, including a catastrophe bond and contingency funds, through sustained fiscal discipline and proactive investment. Its debt-to-GDP ratio fell from around 147% in 2012 to around 62% in 202-25. That groundwork matters when disaster strikes.
Hurricane Melissa’s destruction shows need for climate resilience push
Following Hurricane Melissa, Jamaica was able to secure billions of dollars in reconstruction financing from multilateral banks – finance that might otherwise have been much harder to access. The lesson is clear: resilience can be built into the financial architecture of a country before a crisis arrives. That is the shift we now need to make at scale.
The foundations already exist – in Kingston’s fiscal reforms, in early-warning systems from the Sahel to the Pacific, and in every community that adapted before disaster struck. What is still missing is the political will, and the finance, to take what works and put it to work everywhere, at the speed our world’s new climate reality demands.
To hear more on this issue from high-level officials and experts, sign up for this event during Climate Week NYC, at 8am EDT on September 24 (in person or online), moderated by Climate Home News Editor Megan Rowling: Adapting to the New Climate Reality: Why Accelerating Impacts Demand New Responses.
The post Human security relies on adapting to the world’s new climate reality appeared first on Climate Home News.
Human security relies on adapting to the world’s new climate reality
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy11 months agoSending Progressive Philanthropist George Soros to Prison?
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits